Correlation Between Chuangs China and TTM Technologies
Can any of the company-specific risk be diversified away by investing in both Chuangs China and TTM Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chuangs China and TTM Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chuangs China Investments and TTM Technologies, you can compare the effects of market volatilities on Chuangs China and TTM Technologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Chuangs China with a short position of TTM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and TTM Technologies.
Diversification Opportunities for Chuangs China and TTM Technologies
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and TTM is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and TTM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTM Technologies and Chuangs China is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Chuangs China Investments are associated (or correlated) with TTM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTM Technologies has no effect on the direction of Chuangs China i.e., Chuangs China and TTM Technologies go up and down completely randomly.
Pair Corralation between Chuangs China and TTM Technologies
Assuming the 90 days horizon Chuangs China is expected to generate 157.89 times less return on investment than TTM Technologies. But when comparing it to its historical volatility, Chuangs China Investments is 4.29 times less risky than TTM Technologies. It trades about 0.0 of its potential returns per unit of risk. TTM Technologies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,680 in TTM Technologies on September 5, 2024 and sell it today you would earn a total of 640.00 from holding TTM Technologies or generate 38.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. TTM Technologies
Performance |
| Timeline |
| Chuangs China Investments |
| TTM Technologies |
Chuangs China and TTM Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and TTM Technologies
The main advantage of trading using opposite Chuangs China and TTM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, TTM Technologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in TTM Technologies will offset losses from the drop in TTM Technologies' long position.| Chuangs China vs. Hongkong Land Holdings | Chuangs China vs. Superior Plus Corp | Chuangs China vs. NMI Holdings | Chuangs China vs. Origin Agritech |
| TTM Technologies vs. Chuangs China Investments | TTM Technologies vs. Virtus Investment Partners | TTM Technologies vs. AVITA Medical | TTM Technologies vs. Clearside Biomedical |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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